Comments on: Getting Venture Capital (1 of 5) – Getting Ready http://www.youngentrepreneur.com/blog/2007/11/getting-venture-capital-1-of-5-getting-ready/ Fri, 20 Nov 2009 21:18:36 +0000 http://wordpress.org/?v=2.8.4 hourly 1 By: Scott http://www.youngentrepreneur.com/blog/2007/11/getting-venture-capital-1-of-5-getting-ready/comment-page-1/#comment-25563 Scott Fri, 30 Nov 2007 14:58:42 +0000 http://www.youngentrepreneur.com/blog/?p=280#comment-25563 Determing value of a start-up seems to be one of the biggest disconnects in this process, especially when you get into "Web 2.0" companies or even more specific, social networks. While discounted cash flow methods are most relevant for a VC and founder to reach pre-money valuation, it's still anyone's best guess. The most fundamental aspect of raising VC is then possibly compromised with guesstimates of value -- the founder wants the max $$ for giving up the least equity while the VC wants the max equity for the least $$. At the end of the day, value is what the buyer is willing to pay & seller accept, especially when going the VC route. Traditional <a href="http://www.fairmarketvaluations.com" rel="nofollow">business valuation</a> methods are tough to use in these instances. Determing value of a start-up seems to be one of the biggest disconnects in this process, especially when you get into “Web 2.0″ companies or even more specific, social networks. While discounted cash flow methods are most relevant for a VC and founder to reach pre-money valuation, it’s still anyone’s best guess. The most fundamental aspect of raising VC is then possibly compromised with guesstimates of value — the founder wants the max $$ for giving up the least equity while the VC wants the max equity for the least $$. At the end of the day, value is what the buyer is willing to pay & seller accept, especially when going the VC route. Traditional business valuation methods are tough to use in these instances.

]]> By: gaic http://www.youngentrepreneur.com/blog/2007/11/getting-venture-capital-1-of-5-getting-ready/comment-page-1/#comment-25494 gaic Thu, 29 Nov 2007 16:23:43 +0000 http://www.youngentrepreneur.com/blog/?p=280#comment-25494 Hello Evan, Interesting article. I agree with what you say. But I don't know who are the easiest to convince friends or VC? I am trying to build an Entrepreneurs Investors community. Our idea is to bring to entrepreneurs advice that will help t hem in the growth process (without crawling and begging for help). They can post their needs. Most entrepreneurs are too isolated and just don’t know what to do. They also do not have all the financial resources to ask for advice. We will be honored if you can participate to our community. I leave you the decision to publish the address of the website (thestreetmarket.com). Thanks and good work! Hello Evan,

Interesting article. I agree with what you say. But I don’t know who are the easiest to convince friends or VC?

I am trying to build an Entrepreneurs Investors community. Our idea is to bring to entrepreneurs advice that will help t hem in the growth process (without crawling and begging for help). They can post their needs. Most entrepreneurs are too isolated and just don’t know what to do. They also do not have all the financial resources to ask for advice. We will be honored if you can participate to our community.

I leave you the decision to publish the address of the website (thestreetmarket.com).

Thanks and good work!

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